tv First Business KICU June 14, 2013 4:00am-4:31am PDT
the housing market takes a new turn as banks are trying to get in on the action. in today's cover story, corporate leaders join bill clinton in chicago. how the former president is aiming to get unemployment to 3%. plus, is target's stock about to get a health boost? and, the college degrees that prove that the tassle is worth the hassle. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, june 14. i'm angela miles. in today's first look: stocks roar back! following 3 sessions of sell-offs, the dow gained 181 points, the nasdaq 45, and the s&p 23. postivie data on jobs and consumer
shopping gave stocks a push. also a report surfaced that fed chair ben bernanke will hold a news conference next week to calm fears about the fed's bond-buying program. restoration hardware nails it. shares of the home-improvement retailer gained 11% in late trading after lifing its forecast. the airbus a350 lifts off today as the jet-maker launches its latest competition against the boeing dreamliner. and the harlem globetrotters are reportedly for sale. the team could "net" up to $100 million. todd horowitz of average joe options joins us on this friday. good morning to you. - good morning to you. - what was behind that power- packed rally yesterday? was it retail sales up .6% and jobless claims down by 12,000? did that help? - you know, that probably helped spur it along, but overnight on wednesday night you
had the big sell-off in japan, which sent shivers through the futures market overnight and actually brought the futures down to what we would call a double bottom of support at about 1600 s&p. that seemed enough of a catalyst to get the rally going. i am sure the good news didn't hurt at all, but the market has bounced off a support level, which is perfectly logical, and i think that they probably are going to reach a resistance level. they still look fairly weak. the rally was on fairly light volume, and i think that the market actually- this was a natural bounce after a couple of days of selling. - is it time, todd, to take a closer look at best buy now that microsoft says it's moving some of its stores into best buy? - you know, best buy looks ok, but don't forget, it's already had over 100%+ rally since it was at $12, so i don't know that you want to start chasing a stock that's up at $27 now. it's probably pretty fairly valued, as the market usually expects news, and the expectation was probably something was going to happen. so when we look at it, i don't know that i would want to chase it up here. - what about coty? coty had a
down day on its debut on wall street. is it time to buy that stock? - you know, any time a stock debuts, i like to let it play out for a while. it's really hard to get a good technical read - you take a look atened tf the other ones. so really, i'd let it trade for a while before i would even think about getting involved. to me, it's just another ipo that's out. let's see it trade. i want to see what they can actually do and make sure that it wasn't over-priced, as was facebook. - throw me the money. thanks, todd. - thank you so much. have a great day. in today's cover story, america's economic recovery is center stage at the clinton global initiative, an annual event bringing together several hundred corporate executives and business owners. president clinton told the crowd american manufacturing is on the rebound, with walmart bringing 55 million manufacturing jobs back to the u.s. "we built the world's greatest middle class and did it with big companies as well as little ones." in chicago, president bill clinton said many of those companies are no longer helping their employees move up the ladder of success, and that it creates problems such as
unemployment more than 3 times greater for those without college degrees, job growth for low-wage workers outpacing mid- and high-range, and continued high rates of poverty and food stamps. then he turned to four esteemed panelists to elicit their ideas to reverse those trends. "we've made a commitment to give $1 billion to education by the end of 2015, with an emphasis on k-3 literacy." education was cited repeatedly as the number-one priority needed to drive future prosperity during both the panel discussion and the opening remarks by hillary clinton, who found common themes traveling to 104 nations as secretary of state. "what people wanted was a good job - it didn't matter where they lived." president clinton said unemployment would drop to 3% if other entrepreneurs followed the path of the founder of chobani yogurt, who became an industry leader within five years of opening one small factory using an sba loan.
"without an sba, i couldn't have done what i have done. i think that program works. i think there should be more funds available." the ceo said others could repeat his success by creating a manufacturing start-up in a small town, gaining employee loyalty and commitment with a well-kept facility, and focusing on a common purpose. but panelists say even manufacturing jobs often require advanced studies in math and science, which emphasizes the need for specialized teachers. "23% of our teachers are leaving." clinton says manufacturing is returning to america because the cost of labor is becoming a smaller part, and the u.s. is now able to compete better on the cost of materials, energy and transportation. traders and investors are keeping close tabs on japan's stock market. the nikkei fell 6.4% in yesterday's trading session to its lowest level since april. it ends a strong bull run and indicates the asian stocks are now in bear market territory. the sell-off is happening as the japanese government is leaving monetary policy alone for now, rather than moving forward with aggressive plans to stimulate
the economy. "it looks like they might be going on hold with their current quantitative easing program and not intensifying it further. if that's the case, maybe that will change some assessments for what it means for japanese asset prices. but i dont think it is a sign that people are becoming worried about the japanese economy." that was economist bill adams of pnc bank. the sell-off in the nikkei set off a series of stock market tumbles in europe, china and the u.s. this week. adams says tapering of the federal reserve's bond-buying program could keep the volatility high going forward, especially for china, brazil & and mexico's stock markets. coty's public debut isn't sitting pretty with investors. at $1 billion, it's one of the biggest ipos in the u.s. this year, but investors showed little interest in the stock. shares opened at the offering price of $17.50 and closed flat. in other ipo news, hd supply holdings is set to go public in late june in the fourth-largest
ipo of the year. hd plans to raise more than $1 billion in a range of 22-25 dollars. three private equity firms bought the construction-maker six years ago in the middle of the housing crisis. the supreme court made a landmark decision on human genes. the high court decided unanimously thursday that isolated human genes may not be patented. the case involves myriad genetics, which holds patents on genes both human and synthetic. "the court on one hand unanimously ruled against the company, but on the other hand they also protected 24 different patents with 500 different claims in those patents." initially, myriad rallied on the ruling, then sold off when investors became concerned that other companies will be able to offer dna testing for cancers. actress angelina jolie put the case in the spotlight by revealing she had a preventative double masectomy because she has the gene code that could become cancerous. jolie says myriad actually owns a copy of her gene. scientists are setting new standards for lithium-ion
batteries. the battery, which gained attention after a short- circuit caused the grounding of boeing's dreamliner, will face more aggressive testing. the batteries are already used in ipads and electric cars. however, global demand for the batteries is expected to double over the next 3 years. smartphones are a hot commodity out on the street. at a smartphone summit yesterday, new york's attorney general said roughly 113 mobile phones are stolen or lost every minute. to combat what's being called an epidemic, one of the proposals from the summit is to introduce a kill switch that make phones worthless if stolen. the city of new york is cracking down on buyers of counterfeit luxury goods. the city already keeps a close eye on canal street vendors selling purses and accessories. now, the city council wants to punish buyers with a fine of up to $1,000, or up to a year in prison. some members say it hurts local business and costs taxpayers $1 billion per year. critics claim a year in prison
for buying fake goods is too harsh. timing is everything when buying and selling stocks, and the chairman of lululemon has perfect timing. just before lululemon stock dropped $10 this week, the chairman sold $50 million in shares worth $81.50 a piece. he reportedly earned $49.5 million. the sale wasnned back in december. lululemon gained $2 yesterday to close at $66. gannett is gaining power in the tv market with its buy of belo corporation. the $2 billion buy makes gannett the fourth- largest u.s. owner of major networks. belo owns and operates 20 television stations, with nine in the top 25 markets in the u.s. gannett is already the nation's largest newspaper chain. gannett stock closed at its five-year high of $26. caution is in the air for southwest airlines. the ceo warns travel demand this summer could fall off as more sequester budget cuts take effect. he says passenger revenue will likely fall into the low single digits in the
second quarter. the airline's bookings in march were soft, but were more in line with expectations in june. in a new sign that the housing market is changing direction: banks have started to repossess more homes. repossessions rose 11% in may. as home prices rise and inventory drops, banks now have no reason to hold back on foreclosures and are rushing to get those properties back onto the market. north carolina, oregon, wisconsin and illinois had the highest rates of repossesions. walmart's new hiring strategy is to add temp workers only. walmart tells reuters it's about having enough workers on staff. retail analysts say hiring temps lowers the company's insurance costs under the new healthcare laws. the retailer says some temps will eventually be hired full- or part-time. a pop in father's day spending: the national retail federation says americans are shelling out more for dear ol' dad this year. the average person will spend $120, up slightly from last year. while tech gadgets or outdoor equipment are popular gifts, john faith of retailmenot.com found out what dads really want, and it comes with no price tag at all. "for the top of our polls, 26%
of fathers just really want to spend time with their families. i know that i don't get to spend a lot of time with my family except on the weekend, so just to have a down day where you are having a bbq and hanging out in the backyard sounds great to me, and was at the top of our polls." fyi, in a poll of what dads want the least, neckties topped the list. the co-founder of ben & jerry's ice cream is giving away money. tuesday in dc, ben cohen will pass out dollar bills in a campaign to get corporate money out of politics. he says businesses give away money all the time on capitol hill. the dollar bills in his giveway can be turned in for free ice cream. california leads the way with a growing population of young millionaires, mostly because of an explosion of start-ups in silicon valley. a study by bmo private bank shows 27% of rich calfornians are younger than 40, compared to the national average of 24%.
a college degree greatly increases the chances you'll more quickly find a job and that your earning potential will be a lot greater. however, not all college degrees are equal in those 2 metrics. the respected site bankrate.com has done some research in this, and jessica patel is an analyst with bankrate.com. i think a lot of people might be surprised. they don't think in terms of earning power or success with a particular degree. why don't you first just give us the top five degrees in terms of earning power? - sure. the top five degrees that we looked at were: advertising and marketing, economist, civil engineer, political scientist, and pharmacist. - any sense as to how much a first job might pay for any of those? - we just looked at the median pay, because when you think about repaying your student loan over a number of years, it
kind of equals out from your starting salary going on. - you also look at advanced degrees. what did you find there? - we found that they are not necessarily the best return on investment, because you require so much more schooling, and more schooling requires more student loans. - and if you're, say, a journalist, that can be a very expensive degree depending on the college you go to, and you're not going to be earning all that much at the outset. - yes. i think that all journalists know that once they are pursuing a journalism career, they are not going to get paid nearly as well as they could potentially be paid in other fields. - jessica, why did bankrate.com look into this? is it simply because there's a broad misunderstanding about the value of particular degrees? - we wanted to give students and parents a tool to use when deciding on a major and subsequent career. we wanted to really give them a way to show how valuable these educations are, and to show them the repercussions of taking out these student loans and so many student loans during their college careers. - a lot of people are reevaluating how they pay for
college - in fact, where they go to college. more and more people i know are going to community colleges for the first two years. - exactly, and that can be a really good idea, especially if you know you are going to need student loans, and you know you are going to be pursuing one of these areas of study that would require more than just an undergraduate degree, it might be smart for you to take a few years of community college if you don't have other means with which to cover your expenses. - so i guess i shouldn't have gotten my degree in board game history, you're saying. - [laugh well, you never know. there could be a nice niche for that somewhere. - i don't think so. jessica patel from bankrate.com, thanks so much. - no problem. thank you. thank you, bill. still ahead, as gas prices kick into high gear, our traders have found a way to make money off the spike. traders unplugged is next.
standing by for traders unplugged, from the floor of cme group, traders alan knuckman and andrew keene. we are all ready for your words of wisdom, starting with topic number 1: gas goose - we're paying the highest prices for gasoline right here in the city of chicago. but what's the play to make a profit? - i think the real play is refiners. here in chicago they say 50% of the price of gasoline is because of crude, which is moving up and looks like it's going to try to take out that high at $98 a barrel. but, i like v-l-o, valero. the refiners are 30% of the cost of gas. - when i initially read this question, i said, "very easy, ride your bicycle." i love riding my bike in the summer; unfortunately, it's been raining a lot lately, so i can't
ride my bike. that's an easy way to profit! - how do you- how do you make money? - you're not spending. you're profiting. - no no, we're talking about making money, not saving money. - p-w-e. p-w-e, penn west energy. we've seen a slew of unusual option activity. in june 11s, june 10s, july 11s. the stock is breaking through the $11 level. i think it's headed way higher. - topic number 2: on or off target? - target is up 26% for the year and is now getting into organic groceries. is this a stock you would buy or sell? - selling is not an option when you see a chart that goes as parabolic as this. this is up 26% year-to-date. there are two ways to play: it's long or flat, that's it. maybe buy on a pullback. i don't want to buy on the top right here. we are in a trading range in the s&p 500 futures. i would be looking to buy a pullback, maybe to that $65 level, $67, if you can get in there. 20% of all their revenue is from groceries, so it's not that high. - i like this stock, but like he said, it has already come a long way. you've got to lean on the $60 level if there is a pullback. but if it gets above $76, then that's taking out the decade highs, and from a technical standpoint, that target's $115. so there's a lot of upside to that. - and alan knows decades. - topic number 3: cree is a
bright light. this stock is showing leadership. is it a play on the housing recovery? - led bulbs are plastics of this generation, so they produce eight times as much light as incandescent. so, i think there is a future here. - there's a huge, huge short interest. we talk about this a lot. first solar, tesla, now in cree. i played it to the long side for earnings. you're not going to see this company really pan out to see if it's a good company for a couple years down the road. i don't go into the store looking to see how much money i'm going to save on light bulbs. i do go to home depot like once a week. but i think for the future, as a play, it has bee on fire. same thing: long or flat, that's it. - this week's bonus round has to do with father's day. so tell me, which ticker symbol does not represent an actual corporation or etn? one of these is false. the ticker symbols are: d-a-d, p-o-p, p-a, and d-a- d-a. which one is wrong? - one of my favorites is t-a-p, tap, for coors, but i don't know the rest. - bud, too, b-u-d. i love that one. - there you go. those are
father's day gifts. - father's day! b-u-d and t-a-p. - thank you. it's a terrific father's day, especially for our boss, harvey moshman, who walked his beautiful daughter sarah down the aisle just over the weekend, so congratulations to that family, and happy father's day, guys. - thank you. - first business news continues right after this.
matt shapiro, president of mws capital, joins us now for chart talk. happy to have you on the show as always. and who have been the winners in this market, the people who are playing it very conservatively, or the ramos-type traders? - ironically, it's the conservative investors that have been roughed up a little bit in bonds. and especially investors that got into the etf fixed-income bonds, some of these etfs, the average bond index has dropped about 3%, some of the more aggressive ones, 10%, and people have not seen this for years, and it's making them doubly nervous, because they were conservative in the
first place. on the contrary, it's the go-go aggressive investors, especially in growth such as pharmaceuticals, biotechnology, and the like, that have done really well. and with yesterday's rally, they look well-positioned. - are you seeing people rotating money out of bonds and into stocks? - well, they want to, but they're concerned, and so they actually don't really know where to go. first of all, i do think values in the heavy dividend kind of stuff are very attractive, and even still in fixed-income, as long as you do stuff, say, in the corporate world, in the perferreds that are 5-6% return, that gives you plenty of protection against rising rates. but, at the end of the day, you know me for being growth and income. i think growth stock investments are going to be the tonic for the rest of the year. - thanks matt. - you got it. it's time for us to roll out of here for today. coming up next week, the diamond industry is taking on a whole new ring as online companies give savvy shoppers bigger, better deals on engagement rings. from all of us at first business, enjoy your day... it's
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